21 September, 2020

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USD 16.8 Million Bribe @SriLankan Airlines – Response To Eran Wickramaratne

By Rajeewa Jayaweera

Rajeewa Jayaweera

Former State Minister of Finance and line Minister for SriLankan Airlines (UL) for eight months from March 13, 2019, Eran Wickramaratne took part in the Face the Nation talk show on TV 1 last week.  Faraz Shauketaly moderated the program. The other panelists were Chrishmal Warnasuriya, a former UL Pilot turned lawyer, Asoka Obeysekera, Executive Director of Transparency International, and Capt. Gihan (GAF) Fernando, a former UL pilot and President of Aircraft Owners and Operators Association. The theme of the one hour 20 minutes program was “SriLankan Airlines in crisis” on the topic of the infamous Airbus deal. There were two journalists in attendance.

On Thursday, February 20, 2020, the Daily Mirror carried an extensive interview given by Wickramaratne to Susitha Fernando. It was titled, ‘We suspect the Bribes paid on Airbus purchases were approximately USD 16.8 million.’

That same evening, the former State Minister had much to say during the Parliamentary debate on the Airbus corruption scandal.

This writer published a detailed essay titled ‘SriLankan Airlines Airbus deal‘ on February 16, 2020. Those interested may access the article clicking on the link  as it contains the aircraft acquisition process and other details. No repetition is necessary.  

Having followed the Talk Show, carefully read the interview, and closely listened to the bombastic speech in Parliament, I decided to respond. 

Wickramaratne holds BSc and MSc degrees in Economics from the University of London and is also an Eisenhower Fellow. He worked for Citi Bank for nearly two decades. Expectations from parliamentarians with such academic and professional credentials are much higher than from ‘O’ or ‘A’ Levels failures.

What stands out very clearly is the political bias and lack of objectivity in the arguments presented in all three instances. The focus is entirely on the wrongdoings of the Rajapaksa regime. However, Yahapalana misdemeanors in the context of the national carrier are sadly lacking. 

Given space constraints, this writer will endeavor to provide a few instances utilizing selected examples.  It will highlight the fact, whether it is the Rajapaksa or Yahapalana dispensations, what they do when in power, and say when out of power differ substantially. It is a case of ‘bale thibenakota mole naa, mole thibenakota bale naa.’

During the Talk Show, the former State Minister stated, “I was the Minister in charge of the airline in 2019 until the change of government. I inherited an airline Board in which I did not make any changes. It is usual when Ministers change that they change the Board, and they generally end up putting their friends and relations on the Board.” 

Rajapaksas appointed relations. Yahapalanites appointed friends from their alma mater and party hacks.  The following are the Directors appointed by the Yahapalana government in February 2015 and their connections. 

Chairman Ajith Dias (Prime Minister’s friend and ex-Royall College). Chanaka de Silva and Mahinda Haradasa, (PM’s friends, ex-Royal College, and members of UNP Working Committee). Rajan Brito (former President CBK’s friend), Hadindra Balapatabandi (former President Sirisena’s friend), Rakhitha Jayawardena (PM’ relative and old Thomian), Lt.Col. (Retd.) Sunil Peiris (Ravi Jayawardena’s friend and old Thomian), and N. De Silva Deva Aditya (PM’s friend and MP in European Parliament). CEO Suren Ratwatte, a pilot by profession, was the younger brother of PM’s financial advisor. 

Ratwatte’s ill-advised appointment had far-reaching consequences. At the end of six months, some directors wished to extend his probation period and assign Key Performance Indicators for evaluation in a few months. However, both the Prime Minister and Minister Kabir Hashim instructed directors to confirm him to his post without delay (Board Minute 2.6 dated April 28, 2016).

Financially crippled with lease charges of over USD 1 mil per month per new A330-300 aircraft, the airline desperately tried to lease out at least a few of them. One jet was wet-leased to PIA in early 2016 for six months. Discussions were ongoing to lease a total of three planes for three years. 

Meanwhile, lease agreements of three older A330-200 aircraft MSN 303, 306, and 311 were due to expire in a few months. The CEO informed directors, if PIA leased the three aircraft, the three older planes would be necessary to operate the schedule. Directors gave him the mandate to renew lease agreements of the older planes subject to PIA leasing the more expensive jets. Finally, PIA did not take the aircraft. Meanwhile, the CEO had extended the lease agreements of the three older planes exceeding his mandate at a total cost of USD 54.5 mil. over 72 months, excluding related maintenance costs. 

It eventually split the Directors into two groups. Four directors opposed the extension of lease agreements of the three older aircraft, whereas the Chairman and two others were in favor. One director abstained (Board Minute 10.4, dated January 25, 2017). The decision was overturned by the Cabinet Committee on Economic Management (CCEM item 22/3/2017/10 dated March 22, 2017), and lease agreements extended. 

Several directors decided to suspend the CEO from work pending issuance of a Charge Sheet and also give him the option to resign (Board Minute 6.3 dated January 25, 2018). The Secretary to the Ministry of Public Enterprise Development, in a letter dated February 01, 2018, overturned the decision of directors.  

UL is still in possession of these aircraft. Warnasuriya, in his opening statement, flippantly referred to the acronym UL as the ‘Usually Late’ airline. Wickramaratne taking umbrage, stated, “I would like to state, in 2019, SriLankan Airlines, in two months, won the world’s most punctual airline awards. That credit goes purely to the senior management of SriLankan Airlines. When I left things to them, they knew how to make decisions and run the airline.” 

This assertion is pure eyewash. The reason for winning the said awards is due to the fact, the fleet contains three additional aircraft, signed up for 72 months by the Yahapalana appointed CEO. The management should be found fault for not achieving the award throughout the year despite the additional planes. According to the 2018/19 Annual Report, the daily average aircraft utilization of the six A330-200 planes was 10.92 block hours and of the seven A330-300 jets, 14.35 block hours, a clear case of severe underutilization of the older machines.  

One of the journalists raised the question, “the Chairman appointed by the Yahapalana government declined to even internally investigate some of the less critical findings in the Weliamuna BoI report. The whole BoI report was added to history. Who can we hold responsible?

The question was avoided by giving unnecessary details of criticism of Rs 4 mil paid to Weliamuna. According to the response, the report was passed to the IGP, Bribery Commission, and the Government for necessary action. Paying for professional services is standard. What is not acceptable is to spend taxpayer’s money and do absolutely nothing with such reports. 

The former State Minister’s offhand response, “I won’t comment on what SriLankan Airlines did internally with the report,” fools no one. The question being, what the Yahapalana appointed directors did with the report, he should have answered it and not brushed it aside.  

One area highlighted in the BoI report was the recruitment of over 500 persons from the ‘Nil Balakaya’ gang. Another was of a Flight Stewardess seconded to work in MP Namal Rajapaksa’s private company drawing two salaries besides flying allowances. Did the Yahapalana government and directors wait for the Serious Frauds Office in the UK to investigate such matters?      

Shauketaly put it very aptly. He stated, “you said a number of factual things, but you forgot what happened under your watch (presumably under the Yahapalana watch). 

During the interview with Susitha Fernando of the Daily Mirror, reference was made to profits amounting to Rs 4.4 billion in 2008 before the exit of Emirates management. Reproduced herewith is a screenshot of page 8 from the airline’s 2007/8 Annual Report. Whereas Company Revenue amounted to Rs 78.128 billion, Operating Expenses amounted to Rs 82.154 billion, a Deficit of Rs 4.026 billion. Nevertheless, Profit Before Tax amounts to Rs 4.445 billion. The Profit Before Tax had resulted from the sale and leaseback of three A340-300 aircraft amounting to Rs 5.4 billion (Note 16.1 in Annual Report), in other words, by the sale of assets. In the case of laymen, it may be ignorance, but in the case of a banker, it is sheer skullduggery. Incidentally, the company’s Profit Before Tax in 2006/7 is no better. Profit Before Tax amounts to Rs 568 mil. despite a deficit of Rs 1.4 billion in Operating Expenditure over Revenue.      

Truth be told, the Yahapalana government failed to investigate the Airbus deal chiefly due to its loss of moral authority, having embroiled itself in the Central Bank bond scam.

The former State Minister turned the spotlight on the Treasury for not having “questioned” the decision to acquire aircraft and for “allowing” it. Not since 1977 has the Treasury, or its Secretary overruled the Finance Minister, Prime Minister and President. Treasury Secretaries also kept silent during the ten-year Emirates management period over some very questionable decisions.  

On the one hand, the Treasury remained silent and did not ‘question’ the decision to acquire aircraft. On the other hand, no one questioned the former Prime Minister’s interventions in the national carrier’s administration, not forgetting the loss of USD 54.5 mil. due to the incompetence of the CEO brother of one of his confidants.

Many believe, educated professionals are made of a different clay from that of the hoi polio. That is a misnomer. 

From these few examples, one thing is clear. 

Any person who remained silent through such malpractices does not have the moral authority to point fingers at others and pontificate in Parliament over “peers remaining silent.”

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Latest comments

  • 3
    0

    Like my method has to be implemented.

    • 10
      4

      Rajeewa Jayaweera,

      RE: USD 16.8 Million Bribe @SriLankan Airlines – Response To Eran Wickramaratne

      Isn’t that true? Airbus says so.

      Who took the money? Most of the Rajapaksa Tribe?

      What about the MIG money? Same Story.
      The list is too long.

      Why are you trying to white wash? Just curious. Did you join the tribe?

      • 10
        0

        Whatever it may be, if not for Mahinda’s egoistic reasons for pulling out from Emirates, Srilankan Air may be flying High.

        • 6
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          K. Anaga,

          Have you heard the expression, “Sinhalaya. Modaya”, The Sinhalese are fools?

          Now Mahinda prostrates to All Saffron clad monks, and says that he will listen to them , and do as they request . Is he admitting to his stupidity?

  • 22
    1

    Mr. Eran Wickramaratne’s profile: “BSc; MSc; Eisenhower Fellow. Worked at Citi Bank for Decades”. What’s the USE of all that? Did he deliver the goods as a “Legislator” and a “Responsible State Minister”? It is difficult to understand how he “SURVIVED” at Citi Bank for “Decades”. Did he “survive” in the same manner, he “SURVIVED” in the Parliament of Sri Lanka? His “Excuse” seems to be, he was only assigned to over-look SriLankan Airline in 2019. Was it not his responsibility and duty, as the State Minister of “FINANCE” to look into all aspects that affect the Financial aspects of the State? This “Airline” was “DRAINING” the coffers of the Treasury “Then and Now” and with that knowledge he had and was “SEEING” on a day to day basis; as an “Economist” with such “HUGE” know-how, he did not care to take an interest in making thing around. What is the use of such “Professionals” to appear in “Talk Shows” and “PREACH” on what went wrong. His “Performance” was “DISMAL” to say the least and that goes to prove, “Academics” are not all “MIGHTY” to make things “HAPPEN”. As I said in one of my comments, he was a “PROMISING FIGURE” in politics but “FAILED” in choosing the CORRECT SIDE to play. He failed himself and the side he represented.

  • 6
    4

    Never mind the bullocks, let me say this. As a regular flyer on Sri Lankan, all recent flights I have taken have been exemplary. On most European routes, and especially London, punctuality cannot be faulted. The cabin crew service has been top class. I would say the best from the airlines I have used. Now we all know that some naughty business has gone on further up the line – let the legal eagles sort the mess ot.

  • 9
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    Wrong doings done by A or B are wrong doings.

  • 8
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    Mr. Jayaweera: Taking back Sri Lankan air lines (Emirates Air lines owned only 40%. Even then they made money out of that) was a personal decision and was not at all for the benefit of the country. Opening Mihin Air was completely abuse of public money because the Top management was not responsible, politically motivated people. So lacked integrity, and honesty. Planning to buy CUSTOM ASSEMBLED 14 aircrafts when their budget ( loan from the Treasury) was itself abuse of public money and lack of responsibility.
    Ranil did the same thing. Nishantha Wicranasubghe was a TEA plantation Suprintendent. Ajith Dias, the nexy president or the chairman was aircraft cafetaria owner.
    I think Sunil Handunneththi did something very good by asking the new Management to talk to them. I think COPE committee for the airline should have has Eran Wicramarathne and the Kabir Hassim too in the investigation board. I felt, even the new Air line Management would behave the same given the opportunity. Because the CEO operates as per Chairman’s instruction and not taking responsibility to his own shoulders. Even on that day, they had not appointed a TREASURY – Representative. I felt, even though they have the same legal officer, he to be just a puppet. I did not see any one from AG’s office in the Director board. Management had the mentality that COPE group IS THEIR AGAINST THIS NEW TEAM AND therefore, no need to care, just complain to the new Finance minister saying, they are there to get us. I did not see fear in the eyes of the management, particularly the Airline president. It looks the position is some reward for him for his allegiance. Every one else will be working for him.
    It is futile to blame european companies. there are other private and State air lines do business with them. It is competitive business and they give free goodies.

  • 5
    0

    Sorry something missing. They ordered 14 custom assembled air crafts with only 4 19 million was in their pockets. Those five was simple high way robbery. I am wondering how would the preswent airline chairman would take the burden on his shoulders or whether he would laugh at it saying they fun there.

  • 10
    0

    Hello Rajeewa,
    Thank you very much for the response to Eran Wickramaratne.
    All corrupt politicians should be prosecuted – sadly, most Sri Lankans are idiots.
    Politicians will continue to deceive generations of Sri Lankans!!
    Sadly, I have not added anything new!!

  • 11
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    How easily Eran turns preacher. He says the professionals must fight corruption. What did he do when the bond scam hit the streets !

  • 4
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    In Sri Lanka there are no professionals. A professional should evaluate both pros and cons. All so called professionals are bias and one type sees all the cons and other type sees all the pros (ONLY).

  • 2
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    Economic degrees (BA and MA) when you beat a bush ten may be thrown out. With a MA, he did not work for the Management I suppose. Because of his Eisenhower affiliations, they may have sent, few are in the parliament, to work at least as a National Candidate. I heard Sri Lankan Air lines business decisions were taken in Sirikotha. I heard something like that in COPE meeting talks.

  • 7
    1

    One area highlighted in the BoI report was the recruitment of over 500 persons from the ‘Nil Balakaya’ gang. Another was of a Flight Stewardess seconded to work in MP Namal Rajapaksa’s private company drawing two salaries besides flying allowances. Did the Yahapalana government and directors wait for the Serious Frauds Office in the UK to investigate such matters?

    The above paragraph says it all. Sinhalese politicians of all hues are corrupt up to the neck. They have no moral principles despite boasting about 2,500 years of history and culture.

    As a matter of fact, money wasted on Mihin Airways and Sri Lankan airlines is several times more r than the loss suffered by on the sale of Treasury Bonds. The Yahapalanaya government had blocked Rs.11 billion from the Bank A/c belonging to Perpetual Treasuries Limited.
    The arrest of IHK Mahanama, chief of staff of President Sirisena and Piyadasa Dissanayake Chairman Timber Corporation reveals the depth of corruption prevailing in public service. The duo had agreed to reduce the initial price of Rs. 540 million to Rs. 100 million in exchange for a payoff of which Rs. 20 million was the first payment. Unfortunately, the duo got caught, but hundreds of others out there who had made millions.

    Ministers Rauf Hakeem, Lakshman Kiriella and Sajith Premadasa admitted they had employed their cronies on a salary of Rs.250,000 as supervisors, advisors etc. Thanks, Jayaweera for unearthing the corruption.

  • 3
    0

    Thank you Mr Jayaweera once again for your forthright appraisal of yet another up and coming rascal (?) who is trying to pull wool over eyes by trying to be economical with the truth !

    Just one more to add here, Chrishmal W was never a pilot at UL but a flight despatcher turned cabin-crew; just to correct a minor flaw which doesn’t change the substance

  • 4
    0

    Airbus Namal may have invested the money already

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